You can't look anywhere without seeing an ad these days: TV, magazines, billboards and bus stops are plastered with brand messages. But are you ready to surrender your cellphone to the ad industry?
Your mobile phone beeps. 'Not another spam SMS!' you groan, while negotiating the 7am traffic snarl that's threatening to make you late for a 9am meeting in office. But when you open the SMS to delete it, you realise it has a tantalising offer. No, not an offer to enter a contest for Dh20 off your mobile account.
In fact, this offer will give you free talktime if you visit a website the ad is plugging. So, what do you have to lose? You visit, you accumulate talktime, and the advertiser has his audience.
Welcome to the world of mobile marketing. Well, not exactly the way it is marketed in the Middle East right now. But it will be in future, says Timo Ahomaki, chief scientist and vice-president of product management at US-based mobile messaging services provider,
Airwide Solutions.
It's already changed the face of mobile advertising in Europe and the US. A mobile services provider called Blyk exclusively targets 'young and trendy' customers through ads based on their profile in return for free texts and talk time. These are being delivered by Airwide's platform.
According to Timo, the process of creating a campaign is simple: an advertiser can select the profile of the users they want to target and set frequency caps to prevent over-exposure. Ad-funded mobile networks may be a novelty now, but they are the way of the future.
The mobile marketing industry has huge potential but it must sell itself as an informative, rather than intrusive, advertising medium, says Timo, who visited Dubai recently to assess the potential of the Middle East market.
So, how would he use the mobile internet 'creatively and effectively', from the point of marketing and advertising on mobile phones? "There are really two sides to this," he replies. "Firstly, in order to drive the value of internet usage in mobile devices, you have to get people using it. This has often proved tricky as the end-users do not generally realise that their phones are capable of browsing the internet.
"Also, putting URLs (uniform resource locator) into billboards or TV ads does not generally work very well as typing URLs on a typical phone keyboard is difficult. Hence, to trigger usage, we need to use a channel that is ubiquitous and provides an instant facility to get browsing."
The SMS is the key to advertising in any market, says Timo. "In most markets – the UAE included – SMS is a perfect trigger mechanism. Most users know how to send and receive SMSes and the leap of faith required to click a link embedded in an SMS is a reasonably modest one, especially if the benefit for doing so is clearly stated in the SMS itself."
Once the audience is lured to their first internet site, the advertiser still has a couple of barriers to overcome. "Firstly, the content or service has to be relevant to the user," he explains. "Secondly, and more importantly in the early stages, the user must feel confident that the browsing experience is a safe one and does not create an unexpectedly large bill.
This is where the operator has a crucial role to play.
"Finally, now that we have a captive user actively browsing the internet, we can start using the medium for marketing purposes. Several studies have shown that users are willing to receive advertising on their phones provided it is personalised and non-intrusive.
Using methods like subscriber profiling and contextual targeting, we can pinpoint the subscriber's browsing context (demographic, location and so on) and target relevant and personalised banners to them. This contextual targeting, together with the operators' ability to instantly reward the user with 'free stuff' like talktime, is really what drives the value of mobile marketing over the fixed 'one size fits all' banner ads."
But does this apply in the Middle East and is the advertising and marketing sector here geared to exploit it fully?
"According to studies, the majority of browsing traffic from the UAE is directed to the big international generalist portals like MSN and Yahoo!," says Timo. "In these services, the majority of advertising tends to be reasonably non-targeted and non-local."
One of the first actions to drive mobile advertising is to create local content offerings that drive traffic and, as a result, advertising opportunities in a local context. "The advertising industry itself is in fact in a critical position to enable this development as the availability of local advertisers in mobile from day one will enable the site owners to jumpstart a revenue stream to new services that receive a relatively modest traffic count compared to the big international sites," he says.
"As it stands today, opportunities in services starting from operator-managed offerings to industries such as tourism and real estate remain largely unexplored, although we are starting to see positive development, especially in the area of luxury goods and car retail.
Bear in mind, however, that the interest of advertisers goes hand in hand with the penetration of internet-aware mobile subscribers to target and as long as there is no local context for these subscribers to connect to, the market will see a serious chicken and egg problem."
Early days
Timo is credited with having developed the first WAP (wireless application protocol) service, the first mobile banking programme, and having sparked the ringtone mania.
"I'm a computer science graduate and I came to the mobile services world from biophysics research back in 1994 when I joined Nokia to develop some pre-GPRS all-digital mobile data solutions," he says, narrating how he got involved in developing the SMS. "At the time SMS was just in its embryonic stages and we were doing a lot of research and prototyping on how to access the internet and especially corporate IT systems from mobile."
The mobile banking programme came about when he joined Telecom Finland – later to become Sonera and then TeliaSonera – in 1996 to work on enterprise services including SMS services for corporate customers.
"At around that time we were approached by a person, Erkki Lehtonen, who was working for one of the major Finnish banks. Erkki had this idea of using SMSes to conduct banking transactions, like paying household bills. Together with him, my team worked to launch an SMS-based banking service around mid-1997."
Ringtones followed the same year, when he started discussions with Nokia on the feasibility of downloadable ringtones for their upcoming smart messaging terminal, the 5110i. Downloadable Ringtone Service (Doris) was launched
by Sonera in late 1998 as the first one of its kind complete with revenue share arrangements with ringtone providers and the copyright authorities.
The WAP service followed soon in 1998 with a launch in August 1999 as apparently the first operator in the world. "In essence, we ended up developing a specification, a platform and a service all in parallel," says Timo. "An interesting experience in its own right that we later repeated with many other technology launches including MMS and 3G."
While many of the early services still exist in the market, the ringtones service was really the only one to reach major commercial success. "However, for myself, being able to be part of the experiments of those early years has really been the school that has taught me how to weed real innovation from the clutter of ideas," he says. "Something, I hope, I can use to an advantage in the increasingly rapid phase of service incubation in the internet space."
Rapid development
Timo feels the Middle Eastern telecoms market is going through a period of rapid development at the moment. The award of new licences and the emergence of 3G in the area is promoting a healthy competitive environment that boosts the creativity of operators, service providers and end-users alike.
"While the sector remains reasonably tightly regulated compared to say, Europe, there are clear signs of the operators opening up to new business models including third party content and mobile advertising," he says. "As a consequence, I believe the development will remain rapid for at least two to three years to come, with new and innovative business models entering the market from both the established operators and new entrants."
Shiva Kumar Thekkepat is Feature Writer, Friday.
